Line 5b



If your Form 1099-R shows a taxable amount, you can report that amount on line 5b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method or if the exclusion for retired public safety officers, discussed next, applies.

Pensions and Annuities Taxable Amount

You should receive a Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. showing the total amount of your pension and annuity payments before income tax or other deductions were withheld. This amount should be shown in Box 1 Gross Distribution of Form 1099-R.

Pension and annuity payments include distributions from 401(k), 403(b), and governmental 457(b) plans. Rollovers and lump-sum distributions are explained later. Do not include the following payments on lines 5a and 5b. Instead, report them on line 1h.
•Disability pensions received before you reach the minimum retirement age set by your employer.
•Corrective distributions (including any earnings) of excess elective deferrals or other excess contributions to retirement plans. The plan must advise you of the year(s) the distributions are includible in income.
TAX TIP. Attach Form(s) 1099-R to Form 1040 or 1040-SR if any federal income tax was withheld.

Fully Taxable Pensions and Annuities

Your payments are fully taxable if (a) you didn't contribute to the cost (see Cost, later) of your pension or annuity, or (b) you got your entire cost back tax free before 2024. But see Insurance Premiums for Retired Public Safety Officers, later. If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 5b; do not make an entry on line 5a.

Fully taxable pensions and annuities also include military retirement pay shown on Form 1099-R. For details on military disability pensions, see Pub. 525. If you received a Form RRB-1099 Payments by the United States Railroad Retirement Board, see Publication 575 Pension and Annuity Income to find out how to report your benefits.

Partially Taxable Pensions and Annuities

Enter the total pension or annuity payments (from Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. , Box 1 Gross Distribution) on line 5a. If your Form 1099-R does not show the taxable amount, you must use the General Rule explained in Pub. 939 to figure the taxable part to enter on line 5b. But if your annuity starting date (defined later) was after July 1, 1986, see Simplified Method, later, to find out if you must use that method to figure the taxable part.

You can ask the IRS to figure the taxable part for you for a $1,000 fee. For details, see Publication 939 General Rule for Pensions and Annuities.

Insurance Premiums for Retired Public Safety Officers

If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew who is retired because of disability or because you reached normal retirement age), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for coverage by an accident or health plan or a long-term care insurance contract. The premiums can be for coverage for you, your spouse, or dependents.

The distribution must be from the plan maintained by the employer from which you retired as a public safety officer. The distribution can be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract, or the distribution can be made to you to pay to the provider of the accident or health plan or long-term care insurance contract. You can exclude from income the smaller of the amount of the premiums paid or $3,000. You can make this election only for amounts that would otherwise be included in your income. The amount excluded from your income can’t be used to claim a medical expense deduction.

An eligible retirement plan is a governmental plan that is a qualified trust or a section 403(a), 403(b), or 457(b) plan.

CAUTION. You can exclude from income only the smaller of the amount of the premiums paid or $3,000. This is true if the distribution was made directly from the plan to the provider of the accident or health plan or long-term care insurance contract or if the distribution was made to you and you paid the provider of the accident or health plan or long-term care insurance contract. If you received a distribution from your eligible retirement plan, and you used part of that distribution to pay premiums for an accident or health plan or long-term care insurance contract, you can still exclude from income only the smaller of the amount of the premiums paid or $3,000. The rest of the distribution is taxable to you and must be reported on line 5b.

If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R doesn't reflect the exclusion. Report your total distributions on line 5a and the taxable amount on line 5b. Enter “PSO” next to line 5b.

Simplified Method Worksheet—Lines 5a and 5b

Simplified Method Worksheet—Lines 5a and 5b
If you are retired on disability and reporting your disability pension on line 1h, include only the taxable amount on that line and enter “PSO” and the amount excluded on the dotted line next to line 1h.

Payments when you are disabled.

If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat those payments as disability payments. The payments must be reported as a pension or annuity.

You must include in your income any amounts that you received that you would have received in retirement had you not become disabled as a result of a terrorist attack. Include in your income any payments you receive from a 401(k), pension, or other retirement plan to the extent that you would have received the amount at the same or later time regardless of whether you had become disabled.

EXAMPLE. You were a contractor who was disabled as a direct result of participating in efforts to clean up the World Trade Center and you are eligible for compensation by the September 11 Victim Compensation Fund. You began receiving a disability pension at age 55 when you could no longer work due to your disability. Under your pension plan you are entitled to an early retirement benefit of $2,500 a month at age 55.

If you wait until age 62, the normal retirement age under the plan, you would be entitled to a normal retirement benefit of $3,000 a month. The pension plan provides that a participant who retires early on account of disability is entitled to receive the participant's normal retirement benefit, which in your case equals $3,000 a month.

Until you turn age 62, you can exclude $500 of your monthly retirement benefit from income (the difference between the early retirement benefit and the normal retirement benefit, $3,000 - $2,500) received on account of disability. You must report the remaining $2,500 of monthly pension benefit as taxable. For each month after you turn age 62, you must report the full amount of the monthly pension benefit ($3,000 a month) as taxable.

Simplified Method

You must use the Simplified Method if either of the following applies.
1.Your annuity starting date was after July 1, 1986, and you used this method last year to figure the taxable part.
2.Your annuity starting date was after November 18, 1996, and both of the following apply.
a.The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.
b.On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than 5. See Pub. 575 for the definition of guaranteed payments.
If you must use the Simplified Method, complete the Simplified Method Worksheet in these instructions to figure the taxable part of your pension or annuity. For more details on the Simplified Method, see Publication 575 Pension and Annuity Income (or Publication 721 Tax Guide to U.S. Civil Service Retirement Benefits for U.S. Civil Service retirement benefits).

CAUTION. If you received U.S. Civil Service retirement benefits and you chose the alternative annuity option, see Publication 721 Tax Guide to U.S. Civil Service Retirement Benefits to figure the taxable part of your annuity. Do not use the Simplified Method Worksheet in these instructions.

Annuity Starting Date

Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed.

Age (or Combined Ages) at Annuity Starting Date

If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on their annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date.

If you are the beneficiary of an employee who died, see Publication 575 Pension and Annuity Income. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each beneficiary's taxable amount

Cost

Your cost is generally your net investment in the plan as of the annuity starting date. It does not include pre-tax contributions. Your net investment may be shown in box 9b of Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc..

Rollovers

Generally, a rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan within 60 days of receiving the distribution. However, a rollover to a Roth IRA or a designated Roth account is generally not a tax-free distribution. Use lines 5a and 5b to report a rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA.

Enter on line 5a the distribution from Form 1099-R, box 1. From this amount, subtract any contributions (usually shown in box 5) that were taxable to you when made.

From that result, subtract the amount of the rollover. Enter the remaining amount on line 5b. If the remaining amount is zero and you have no other distribution to report on line 5b, enter -0- on line 5b. Also enter "Rollover" next to line 5b.

See Publication 575 Pension and Annuity Income for more details on rollovers, including special rules that apply to rollovers from designated Roth accounts, partial rollovers of property, and distributions under qualified domestic relations orders.

Lump-Sum Distributions

If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the "Total distribution" box in box 2b checked. You may owe an additional tax if you received an early distribution from a qualified retirement plan and the total amount was not rolled over. For details, see the instructions for Form 1040 (Schedule 2) Additional Taxes, PART II OTHER TAXES, Line 8 Additional tax on IRAs or other tax-favored accounts.

Enter the total distribution on line 5a and the taxable part on line 5b. For details, see Publication 575 Pension and Annuity Income.

TAX TIP. If you or the plan participant was born before January 2, 1936, you could pay less tax on the distribution. See Form 4972 Tax on Lump-Sum Distributions.

Compiled and edited July 19, 2025 by administrator.
Last reviewed or updated 2:59 PM 7/19/2025 by administrator.